After several months of hints and comments that it was at work on a handheld computer using Microsoft's Pocket PC operating system, Toshiba on Monday unveiled Genio. The initial Genio will be sold only in Japan. However, Toshiba plans to introduce a "full portfolio" of Pocket PC-based handhelds in North America later this year.

The initial model for Japan features both CompactFlash and Secure Digital flash memory expansion slots, similar to the HandEra 330 that uses the rival Palm operating system. The new unit also features Intel's 206MHz StrongARM processor, 32MB of memory and a color screen. Toshiba bills it as providing more than eight hours of battery life and weighing less than 8 ounces.

The first Genio will come in two versions, either with or without a 1GB IBM Microdrive. The version without the tiny hard drive will be launched in Japan on Aug. 20, while the Microdrive-equipped model will be available there at the end of September.

Microsoft said Toshiba's entry into the Pocket PC market will help the software giant in its efforts at selling to corporate customers and in the Japanese market.

"We think expanding internationally is critical in finding our place," Microsoft product manager Ed Suwanjindar said. He cited projections from researcher IDC that the market for handhelds will grow to 30 million units annually within two years--more than double the size of today's market.

Still, Pocket PC-based handhelds are a distant second to Palm OS-based handhelds in the U.S. retail market. Palm OS-based handhelds accounted for 86 percent of unit sales in May, according to NPD Intelect.

Toshiba joins Compaq Computer, Casio and Hewlett-Packard as the big-name computer makers that offer handhelds with Pocket PC, a slimmed-down version of Windows. NEC also said last week that it plans to build a handheld using Microsoft's operating system.

At a press conference in Tokyo, Toshiba said the standard version of the Genio will retail for about $560 (70,000 yen), according to Reuters. The more powerful model with the built-in Microdrive will sell for about $800.

Among the optional add-ons are a cable to connect the unit to a cell phone, as well as a Bluetooth card that fits into the Secure Digital expansion slot to provide a wireless connection to other nearby devices.

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